Many fearful of healthcare bills' billions in Medicare cuts

Uncertainty for seniors

David K. Yamamoto/ Special to The Star
Sue Warnock, who lives on a fixed income, shows the medication she needs for her various ailments, Wednesday, Dec. 2, 2009, at her home in Camarillo, Calif. Warnock worries of losing the ability to pay for healthcare if her premiums go up as a result of healthcare reforms.

Sue Warnock sold bookkeeping systems for a living. She knows numbers. She knows Social Security and her pension provide about $1,700 a month to cover the space she rents for her mobile home, the occasional dinner at Carrows and all her other expenses.

The 76-year-old Camarillo resident knows if she doesn't win at bingo one week, she better not play the next. And like many seniors, she's convinced 11 zeros could stand between her and her doctor.

The healthcare proposal being considered in the Senate would take more than $400 billion out of Medicare over 10 years through changes in payments to insurance companies and healthcare providers. The proposal that passed the House takes about $450 billion from Medicare. The huge numbers ignite fear about people living on fixed incomes not being able to find doctors, hospitals and nursing homes that will treat them at a price they can afford.

Economists and senior advocacy groups such as AARP say the anxiety is misplaced and driven by the scare tactics of reform opponents. They say reform would protect seniors by reducing the cost of prescription drugs and other services. The proposals also guarantee current Medicare benefits won't be cut.

But a report from the agency that runs Medicare and Medicaid predicts changes in the payment system could force hospitals and nursing homes to turn away seniors. Doctors have the same fear.

Many of the people shooting pool at senior centers, playing bingo or trying to figure out their prescription drug plans have felt like a target for months — ever since they learned much of the reform would be funded through Medicare. They don't understand how more than $400 billion can be cut without benefits being lost or costs increasing.

"Common sense will tell you that. Of course no one in the White House has it," said Warnock, who possesses both a cutting wit and an Arkansas drawl. "If I was an AARP member, I'd cut my card in half."

Private premiums could rise

Much of the funding cuts in the Senate and House plans come at the expense of the private insurance companies that contract with the government to provide basic and supplemental benefits in plans known as Medicare Advantage. Supporters of the cuts note that the government currently pays private insurers 14 percent more for each senior than in traditional Medicare.

They say that excess takes away money from the government and taxpayers.

"The problem that we have is that these additional dollars that pay for Medicare Advantage are subsidizing insurance companies at the expense of long-term Medicare solvency," said Ernie Powell of AARP California.

But the cuts could mean higher premiums and fewer supplemental benefits in the advantage plans. Like many advocates, Katharine Raley of the Ventura County Health Insurance Counseling and Advocacy Program believes the private plans sometimes push seniors into insurance choices that don't fit their needs. She predicts the plans could react to reform by pushing copays to as high as 20 percent.

"They couldn't afford it," she said, noting that seniors might not see many alternatives except to go without. "That's what most of them do: They go without services."

Bridging the doughnut hole

But the reform plans include many provisions designed to help the surge of people in or near senior citizen status. The House bill narrows and eventually eliminates the so-called Medicare "doughnut hole," the current prescription drug coverage limit where seniors have to pay out-of-pocket for medication.

The House proposal eliminates copays for preventive services such as mammograms and colonoscopies. And in both plans, current Medicare services could not be cut.

People nearing 65 would receive protection, too. Both proposals limit the amount insurers could increase premiums based on age.

AARP officials say one of the most compelling reasons for reducing Medicare's financial bulk is that at its current pace the system is projected to go broke in 2017.

"The cost of doing nothing is a much, much higher sacrifice," said Powell, noting that the nation's uninsured crisis only exacerbates Medicare's financial burdens. "You have whole groups of people in their 50s who may have chronic conditions and are uninsured. They're taking that into Medicare."

But at issue is how much Medicare can be changed — how much money can be cut — without taking away care from seniors.

"The question is how far can you bend it before it breaks," said Steve Wallace, associate director for the UCLA Center for Health Policy Research.

Turning away seniors

One breaking point could be access, according to analysts from the Centers for Medicare and Medicaid Services, which analyzed the House proposal in November. Changes in the way hospital and nursing homes are paid and reductions in annual increases could mean their reimbursements eventually lag way behind costs, the report says. Many providers could be forced to no longer accept patients on Medicare.

Fewer providers means less care for seniors.

"Absolutely. They could have a harder time getting care," said Jim Lott, executive vice president of the Hospital Association of Southern California. "If a hospital can make the business case to not take Medicare patients anymore, that closes that door."

But though providers complain about Medicare reimbursement, it pays much better than the Medi-Cal government insurance program. And analysts predict that few hospitals or nursing homes would be able to survive if they said no to Medicare.

Doctors are in the same dilemma. They're worried about changes in the way they would be paid and the possibility that, as in the current system, reductions in reimbursement would be considered — though likely rejected — every year.

Dropping like flies

Some doctors already don't accept Medicare and Dr. Richard Declusin, an Oxnard heart surgeon, predicts many more could follow suit.

"People are going to be dropping Medicare like flies unless something is done," he said.

But economists and many doctors believe financial reality will prevent that from happening. If doctors don't treat seniors, they'll lose income.

"I think it's too large of a population and too large a segment of the healthcare dollar," said Dr. Lanyard Dial, CEO of the Livingston Memorial Visiting Nurse Association and Hospice. "It's probably a third of the healthcare dollar right now."

Some people at senior centers in Thousand Oaks, Ventura and Camarillo say they support healthcare reform because of the 46 million Americans who are uninsured. Some say they're disinterested in the issue. One bingo-playing woman labeled herself a fatalist who doesn't worry until things happen.

But the seniors who are worried cite the possibility of rising premiums, their own limited finances and political biases. Almost all of them return to the opinion offered by Lillian Elswick, 89, of Oxnard, who says she reads the paper daily to see if she's in the obituaries.

Elswick said a main reason she worries about government reform is because it's government reform.

"They'll screw it up royally, because look at what they do with everything else," she said.